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That doesn't cover how the R&D costs are paid for, plant costs, corporate salaries, etc. There are more things that go into the financials of a vehicle than a few widgets.
Trust me....I know the financials of Tesla models very well.
This is accurate. The major manufacturers include r&d into their cost breakdown and Tesla doesn’t or at least they hadn’t been doing it
This is accurate. The major manufacturers include r&d into their cost breakdown and Tesla doesn’t or at least they hadn’t been doing it
It's a common trick to create certain calculations that exclude certain things. Some automakers will essentially create some extra rows of per unit calculations on vehicle income statements such as using both Contribution Margin and Gross Margin/Variable Profit to confuse people. Then they can cherry pick and choose which numbers to use to make a point regarding a certain vehicles profitability, or lack thereof.
That doesn't cover how the R&D costs are paid for, plant costs, corporate salaries, etc. There are more things that go into the financials of a vehicle than a few widgets.
Trust me....I know the financials of Tesla models very well.
You should short the stock. Obviously if they are losing money on each vehicle produced, the stock is overvalued.
You should short the stock. Obviously if they are losing money on each vehicle produced, the stock is overvalued.
That sounds great except for that whole insider-trading thing. That being said, stock prices are based on expected future earnings not current profit levels.
There is no doubt in my mind that there are going to be more mergers, and maybe even bankruptcies, in the auto manufacturing sector in the near term (2-5 years). Marchionne of FCA predicted this a half-dozen years ago, and FCA's merger with Peugeot may only be the beginning of the beginning. I can see some smaller players either going away or gobbled up by the larger players - Tesla's inroad will not be invisible to either BMW, Jaguar, or Mercedes, and may push one or all to the tipping point (if it is able to survive itself, Z-score aside). IMHO, the U.S. only forestalled the inevitable when we bailed out GM and Chrysler in 2009, the worldwide industry may be healthier today if both had been allowed to go through "real" bankruptcies (Ford was probably hurt the worst by artificially propping up GM, as they would have likely benefited from taking much of their market share). The argument that "The supply chain" would have collapsed never made sense to me, if GM would have ceased operations, people would have bought the same number of vehicles (albeit from different sources); PP&G would have made just as many windshields and Goodyear the same number of tires either way. I believe "Cash for Clunkers" is now widely viewed as being a failed program and waste of tax dollars. Interestingly, many of the vehicles purchased during that program are now about ten years old and approaching being ready for replacement. Anybody know the "average fleet age", and its historic impact on U.S. auto sales?
Mercedes isn't going anywhere. IMO they read the tea leaves very accurately 22 years ago when they merged with Chrysler to update their production lines and get a foothold on several segments in the United States and Canada that they were missing out on. Yes, their quality did suffer for a few years between 2000 and 2006-07 but have been long since ironed out. Fast forward to today and they have a car for every budget. They read the market very well and they have an iconic, prestigious brand.
You should short the stock. Obviously if they are losing money on each vehicle produced, the stock is overvalued.
This just shows an attachment from reality. The poster you are responding to is entirely accurate in his/her commentary and your response is just a fanboy response. Stock price often times can drift from fundamentals and what makes logical sense on a basic level. If you simply do some research you’d see the accounting for r&d is certainly materially different between Tesla and the field
This just shows an attachment from reality. The poster you are responding to is entirely accurate in his/her commentary and your response is just a fanboy response. Stock price often times can drift from fundamentals and what makes logical sense on a basic level. If you simply do some research you’d see the accounting for r&d is certainly materially different between Tesla and the field
Sure. But back up to his big picture point - Tesla is losing money on on the Model 3 SRs i.e. the marginal profit on making and selling an additional SR model is negative.
If that was true, common sense would say they wouldn't make and sell those vehicles. But oh no, they are selling them to create some Potemkin Village of sorts.
The implication of accounting fraud is there.
So short it. Obviously adjust investment so that it can handle big fluctuations in share price.
Sometimes all you have to do is bluster your competition. Ray Cohn knew this tactic very well. (Watch the Studio 54 documentary, or the Trump series on Netflix, he's mentioned in both)
BMW, the 3-series, specifically, has been what most sports cars and entry level luxury cars were compared to in Auto Magazines. It was the gold standard. Now, you can't have an EV review without comparing it to a Tesla. Statistics like these are a tactic used to ruffle the feathers of industry fanboys and sources known to hold these pedestalized icons in such a favorable light.
Propaganda like the figure in question can be used to buy more time and trust from investors and support an already overvalued stock price. The funny thing is, TSLA is valued as such because of the hype, not because of their current financial health and solvency. Just looking at the lead times experienced by customers who have put down a hefty deposit, I wouldn't trust them to provide timely payment. Amazon has a high stock price, too, but it infamous for terms that no other company would be able to negotiate, such as Net 180, and being late for even that.
That sounds great except for that whole insider-trading thing. That being said, stock prices are based on expected future earnings not current profit levels.
Insider trading won’t be able to keep a lid on a business that constantly loses money. It makes an insider trading scandal even more explosive and likely to cause the company. Sounds like if you should go extra heavy on shorting the stock.
Sure. But back up to his big picture point - Tesla is losing money on on the Model 3 SRs i.e. the marginal profit on making and selling an additional SR model is negative.
If that was true, common sense would say they wouldn't make and sell those vehicles. But oh no, they are selling them to create some Potemkin Village of sorts.
The implication of accounting fraud is there.
So short it. Obviously adjust investment so that it can handle big fluctuations in share price.
Companies operate at a loss often but how you get there is the question. I’m not sure the poster is necessarily implying fraud but certainly for anyone that follows the numbers in the auto industry understand that Tesla choose a different accounting methodology than what is normal in their industry. They could report profitability per unit including r&d as the others do and make a footnote with a figure excluding r&d to show the delta of a new company operating in the space
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